Why pharmaceutical executives will ask: "Where have all my sales gone?"
Generics could grow to capture 14% of the global healthcare market
A recent report predicts that $100 billion of US and European pharmaceutical company revenues are now threatened by generic drugs.
Big pharma should be scared. The blockbuster cash cows of recent years are increasing under pressure from generic alternatives as patents expire.
Generic Competition 2007 to 2011 notes that the four year period 2007–11, will see the expiration of patent protection for an average of ten drugs a year in the US. As 2005 saw a decline in the number of NCEs approved down to 18 from 23 in 2004, there is clear evidence that the loss of revenue from patent-protected drugs will impact upon the growth of the industry when so few new drugs are reaching the market.
The most severely affected companies are Bristol-Myers Squibb, Takeda, AstraZeneca and Eli Lilly with greater than 40% of their revenues threatened, while Merck and Pfizer both face the serious problem of potential erosion of over 50% of their 2005 revenues. There is a considerable difference between the top 20 pharmaceutical companies in both the number of products and the amount of revenues under threat from the potential introduction of generics. For example, neither Amgen, which currently markets only biological products, and Merck KGaA, whose portfolio is primarily mature products, face any threat from generic competition, while Roche, Bayer-Schering, Abbott and Schering-Plough face limited threats to their revenues.
In 2005 global sales of generic products were estimated to be $65 billion, accounting for 14% of the global healthcare market. The five year period to 2011 could see $20 billion of additional revenues generated by the generics companies, significantly enhancing their growth prospects.
